Thinking of Self-Employment?
At some point in your career, you have probably been tired of working for the man and wondered if self employment is an option for you? In some cases the decision may be easier because of a pending layoff or job uncertainty. Whatever the situation is that is causing you to evaluate possible self-employment, there should be some planning that goes into that decision.
First, you need to consider your insurance options, especially in the area of health insurance. Whether you are laid off or resign from your current job, you are eligible to continue your existing coverage through a COBRA election. You will have to pay the bill for this, but coverage is available for 18 months at a cost not to exceed 102% of what your employer pays. Chances are this would be cheaper than comparable coverage you bought on your own, because your employer was paying less money because of volume discounts. Also, there are other insurance options you may need to consider that were provided by your employer as well. This may include disability and life insurance that were part of your benefit package.
Second, be sure that if your self-employment is in an area that is similar to the job you are leaving behind, there is not a non-compete agreement in place that you would violate. Companies can get aggressive in enforcing this and they have lawyers under contract so fighting an individual in court is not a problem. If you are unsure, you can check with the human resource area of your company.
Third, think about making any large purchases or credit moves before you leave your current job. If you are planning to buy a vehicle, purchase a house, or even refinance your house, it will be easier to do it while you are still gainfully employed. When you are self employed your income will be harder to verify in the early stages of your work, so credit could be hard to obtain. It may take several years to build a solid case that you are a good credit risk again, because so many people who strike out on their own do not succeed.
Finally, there are other intangibles to consider. If you are employed, you usually know what your income is each month, so it is easy to budget. If you are self-employed, your income levels could vary, especially early in your business. You may have to adjust your lifestyle very quickly to accommodate this change. There might be no vacations for awhile or a lot less eating out and other entertainment. Plus, there will be an adjustment from leaving a workplace with daily interaction with people (who may be your friends) to working alone in most cases. You might start researching other ways to fill that void, like volunteer work or civic organizations. Also, you must have discipline to be self-employed because no one is checking deadlines or verifying your work. You have to do that on your own, so be prepared.
At the end of the day, there can be a lot of risk in self-employment but also a lot of rewards. Remember to do lots of research and planning ahead before you start this venture. Good luck!
At some point in your career, you have probably been tired of working for the man and wondered if self employment is an option for you? In some cases the decision may be easier because of a pending layoff or job uncertainty. Whatever the situation is that is causing you to evaluate possible self-employment, there should be some planning that goes into that decision.
First, you need to consider your insurance options, especially in the area of health insurance. Whether you are laid off or resign from your current job, you are eligible to continue your existing coverage through a COBRA election. You will have to pay the bill for this, but coverage is available for 18 months at a cost not to exceed 102% of what your employer pays. Chances are this would be cheaper than comparable coverage you bought on your own, because your employer was paying less money because of volume discounts. Also, there are other insurance options you may need to consider that were provided by your employer as well. This may include disability and life insurance that were part of your benefit package.
Second, be sure that if your self-employment is in an area that is similar to the job you are leaving behind, there is not a non-compete agreement in place that you would violate. Companies can get aggressive in enforcing this and they have lawyers under contract so fighting an individual in court is not a problem. If you are unsure, you can check with the human resource area of your company.
Third, think about making any large purchases or credit moves before you leave your current job. If you are planning to buy a vehicle, purchase a house, or even refinance your house, it will be easier to do it while you are still gainfully employed. When you are self employed your income will be harder to verify in the early stages of your work, so credit could be hard to obtain. It may take several years to build a solid case that you are a good credit risk again, because so many people who strike out on their own do not succeed.
Finally, there are other intangibles to consider. If you are employed, you usually know what your income is each month, so it is easy to budget. If you are self-employed, your income levels could vary, especially early in your business. You may have to adjust your lifestyle very quickly to accommodate this change. There might be no vacations for awhile or a lot less eating out and other entertainment. Plus, there will be an adjustment from leaving a workplace with daily interaction with people (who may be your friends) to working alone in most cases. You might start researching other ways to fill that void, like volunteer work or civic organizations. Also, you must have discipline to be self-employed because no one is checking deadlines or verifying your work. You have to do that on your own, so be prepared.
At the end of the day, there can be a lot of risk in self-employment but also a lot of rewards. Remember to do lots of research and planning ahead before you start this venture. Good luck!